Why do some firms adapt and even thrive when major unexpected shocks occur? We hypothesise that structured management practices are a General Purpose Technology that helps firms adapt to unforeseen shocks. Using a novel, custom-designed survey, we find that firms with more structured management practices were more resilient to unexpected shocks, such as the Covid-19 pandemic, adopting homeworking and online sales practices more fully and avoiding larger falls in their sales.
Linking at the firm level to a high-frequency business survey, we show that firms with highly structured management practices undertook more product, process and logistics innovation to facilitate enforced changes in working practices, implemented and adapted positively to supply chain changes, switched to homeworking more quickly and adopted a higher rate of hybrid working more permanently. We conclude that this episode illustrates the many mechanisms by which structured management practices may improve firms’ resilience to shocks.
Revised November 2024